Investment-Grade Composite Spread Widens Marginally To 231 Basis Points

Stocks and Financial Services Press Releases Friday September 25, 2009 09:07
Bangkok--25 Sep--Standard & Poor's

Standard & Poor's investment-grade and speculative-grade spreads widened one basis point each yesterday, to 231 basis points (bps) and 739 bps, respectively. By rating, the 'AA' spread widened one basis point to 154 bps and 'A' and 'BBB' remained unchanged at 192 bps and 294 bps, respectively. The 'BB' spread tightened one basis point to 514 bps, 'B' tightened 3 bps to 709 bps, and 'CCC' tightened 7 bps to 1,121 bps.

Industry spreads were mixed, with financial institutions and industrials tightening marginally, to 398 bps and 382 bps, respectively, banks and utilities remaining unchanged at 318 bps and 221 bps, respectively, and telecommunications widening one basis point to 326 bps.

Despite material tightening since their record highs in December 2008, the speculative-grade spread remains range-bound within a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recessionary period.

Media Contact:
Ana Sandoval, New York (1) 212-438-5095, ana_sandoval@standardandpoors.com
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760

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